I'm going to give you one more chance. If you are a halfway reasonable person with a shred of intellect, your reply should be "I see what you are saying, and I can accept the fact that some people have valid reasons for believing that Google may be overvalued." After all, for every share of Google stock that is bought, another share is sold. And many of these shares are from Google itself.
Value != Return
What's the value of a lottery ticket? A couple bucks, but if it hits the jackpot was it a good investment? No, you were just lucky. By your faulty logic, however, Google's stock price and analysts opinions are proof that Google is worth that much. It's completely backwards, and through this whole argument, you continually revert to stock price as affirmation that you are correct with your assessment of Google.
Every time I make a point, you reply with a personal attack. This does nothing for your argument other than make me dislike you. I am in college and this doesn't mean shit, 90% of my business education comes from outside of the classroom. I haven't mentioned a single thing that isn't very, very real. The dividend theory doesn't apply to Google's return, but it's a very good cerebral way to think about the value of a company (for people who aren't hopelessly thickheaded).
And you shouldn't be so fast to discredit academic investing. Unlike the hoards who are buying and selling shares on Scottrade, the real pros are using really, really academic and rigorous methods to spot investments. Take John Meriwether, for example, he was the founder of LTCM. Granted LTCM went bust, but for four years LTCM provided investors with 25% return, an unholy rate, by merely playing bond spreads. How did he manage this? He brought in the brightest of the brightest, including Scholes of the Black-Scholes model for pricing options. Blah, you think, these lame ass models are too academic to be applied in real-life. But LTCM used them, and used them well. The lesson they learned (from the Russian default) will prevent a similar collapse from happening again. Meriwether has started yet another hedge fund, and while I'm not sure if his cast is the same as last time, he is proof that brains and rigorous academics can be useful.
But you and I aren't Harvard grads with inside info on the NYSE. We didn't pioneer new models for pricing options, or find new methods for arbitrage. By the time we get to the market, most of the value has already been sucked out. Most of the widely available information won't help you in the least to spot a good investment, because everybody else has seen it too. The ratios that you so love to tote are available to any 12 year old on finance.yahoo.com.
Without the edge that the pros have, the only thing you can do is to base your decisions in the most logical manner possible. For me the question is: "Is google worth $120billion despite its hardships in finding lasting revenue other than advertising?" No, I say. Google is a wonderful company, but its not 80 PE wonderful. And if you can't accept the fact that I have very real reasons to doubt Google (without discrediting me), then you are ignorant and hopeless.
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